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Shiba Inu is outperforming Bitcoin in 2024, and it’s not even close. But does that make it a buy?
Capital markets are off to an exciting start in 2024 S&P500 AND Nasdaq composite they gained about 11% each thanks to AI euphoria, a strong energy market and new breakthroughs in the pharmaceutical sector.
However, investors have plenty of it alternative options outside the capital markets. In recent years, cryptocurrency has emerged as a popular choice for investors beyond stocks and bonds.
With the price up 69% so far this year, Bitcoin (CRYPTO:BTC) has largely outperformed the broader market.
Yet, you would be surprised to learn that it exists another crypto token that has outperformed Bitcoin this year? As of the market close on May 20, the price of Shiba Inu (CRYPTO:SHIB) is up 136%, almost double that of Bitcoin.
Let’s analyze whether Shiba Inu is right for you and whether the token is a more profitable option than Bitcoin for cryptocurrency investors.
Bitcoin vs Shiba Inu: what to know before investing
When it comes to cryptocurrency, Bitcoin is probably the best known. While not yet entirely a staple among modern currency transactions, Bitcoin is increasingly used and accepted as a means of payment.
While cryptocurrencies generally have a more polarizing reputation than more established asset classes, Bitcoin is often referred to as “digital gold” given its reputation for unique value during volatile economic times.
Outside of Bitcoin, there are a myriad of cryptocurrencies. A common misconception is that each of these tokens represents a competing product to Bitcoin. It’s not really like that. In fact, many cryptocurrencies have no real utility and become relevant for the wrong reasons.
You may remember that a token called Dogemoneta It briefly entered the scene a couple of years ago after personalities like Elon Musk and Mark Cuban seemed to endorse its applications.
While a certain amount of humor can be appreciated here, CEOs and prominent investors should refrain from commenting on anything too specific about the markets.
The reason? Well, following the endorsement of Dogecoin by numerous billionaires, amateur retail investors have flocked to the token. This resulted in outsized momentum that fueled the price of Dogecoin, leaving many investors as bag holders.
This is where Shiba Inu comes in. Like Dogecoin, Shiba Inu is classified as a meme coin. It is not considered anywhere near as prolific or sophisticated as Bitcoin, and its price reflects this.
With a total supply of 1 quadrillion tokens, Shiba Inu is currently trading at a price of $0.000026. Since the value is less than a penny, the Shiba Inu is essentially worthless.
The story continues
At a price of around $69,000, Bitcoin is largely determined by supply and demand. Instead, the prices of Shiba Inu and most meme coins are simply a reflection of their current sentiment on social media.
Image source: Getty Images.
The bottom line
Although the Shiba Inu’s percentage return so far in 2024 seems impressive, this is clearly an example of the law of small numbers. In other words, a triple-digit return can lend credence to a profitable opportunity. However, the Shiba Inu’s upside potential is probably more psychological than real.
Furthermore, given the number of tokens exchanging hands, it will take a huge number of bullish investors buying (and holding) Shiba Inu before its price reaches even a penny, let alone a dollar.
While cryptocurrencies are widely considered a riskier investment compared to stocks or bonds, investors may want to consider some exposure for diversification purposes.
Having said that, however, I would encourage investors to avoid meme coins. A good analogy would be to think of meme coins as similar to penny stocks.
Just as with stocks, cryptocurrency investors should look for established and proven opportunities. Right now, Bitcoin wins in this regard and is a much safer choice than Shiba Inu, regardless of how the percentage returns appear at first glance.
Should You Invest $1,000 in Shiba Inu Right Now?
Before you buy Shiba Inu stock, consider this:
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Adam Spatacco has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Bitcoin. The Motley Fool has a disclosure policy.
Shiba Inu is outperforming Bitcoin in 2024, and it’s not even close. But does that make it a buy? was originally published by The Motley Fool